In college scholarships, sweat the small stuff

While students and parents complain about the high cost of college, many ignore opportunities to pick up scholarship money that's there for the taking.

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The latest numbers from the National Center for Education Statistics indicate that college students are relying more heavily on federal and state loans to help finance their college educations. In 2004, almost half of all full-time undergraduate students took out loans, with the average person borrowing $6,200 for the year.

Yet 70 percent of survey respondents told Lunch-Money.com they wouldn't bother to apply for a scholarship award of $100, and only about half were willing to spend the time if the award wasn't at least $500. Those are generous numbers based on the attitudes Alisa LeSueur, a certified college planning specialist in San Antonio, encounters week after week.

"Kids don't want to take 30 minutes to write an essay for a mere $100. First of all, they're kids and they don't understand money. They see a $20,000 college bill and think, $100. Big deal. It's an all or nothing. 'If I can't make a major dent, why bother?'" she says.

So they nix a world of possibilities like the $500 Mesothelioma Memorial Scholarship and $500 for the Abraham Lincoln Brigade Archives' George Watt Memorial Essay Contest. Sure, the top prize at the Easterday Poetry Award is $1,000, but they also give away amounts between $500 and $1,000 to honorable mentions. Or how about the Casualty Actuarial Society/Society of Actuaries, handing out money to mathematically talented minorities underrepresented in the actuarial profession? Heck, they even throw in a $500 bonus for any scholarship applicants who take and pass an actuarial exam during the year.

Students can even pick up $200 to $500 from the Stuttgart Chamber of Commerce for an admirable showing in its duck calling contest in Arkansas.

LeSueur lays a chunk of the blame at parents' doors. "I've had kids say to me, 'I'm not writing an essay!' like it's going to kill them. What's worse, parents come to me and say, 'Oh, she won't write an essay.' Well, who's the mom here? This is your retirement money we're cutting into."

The power of small
To pocket that $100 in the real world, you actually need to bring in $130, thanks to taxes and FICA withholding. So even at a generous $10 an hour, students would have to work 13 hours to come up with the dough. Few essays require that much time. And as long as the scholarship amounts don't exceed the cost of attendance, taxes don't enter into the picture. (If you are lucky enough to win more than you need, only the overage is taxable.)